Chinese car manufacturers are already causing major problems for their German competitors in their domestic market. But in Europe, electric cars from China have so far been more of a niche product – even if the number of registrations here has recently increased. One reason for this: Since no Chinese company has yet built cars in Europe, their price advantage is not as great as in China. But that could change soon.
On Friday, BYD, the market leader among Chinese electric car makers, announced that it would build a factory in Hungary. The company wants to produce both batteries and vehicles in Szeged. The company is already producing electric buses in the Hungarian city of Komarom.
It is one of the largest investments in Hungarian history, said Hungary’s Foreign Minister Peter Szijjártó. He did not mention a specific investment amount.
With this step, BYD should soon be able to offer its cars significantly cheaper than before. The timing for the new factory is also good because proceedings against Chinese car manufacturers are currently underway in the EU. The issue is whether companies benefit too much from government subsidies in China. There is a risk of high import tariffs, which BYD could avoid with its own production in Europe.
Germany also had hopes of becoming the first European location for Chinese electric car production. In Saarlouis, Saarland, the car manufacturer Ford was looking for a company that would take over the US company’s plant there. BYD is said to have been very interested in this too, but the talks ended without results. Now BYD is going to Hungary – and the price war in the domestic market will soon become much tougher for German manufacturers.
Hungary is also a popular location for German premium car manufacturers. Audi and Mercedes produce electric cars or engines in their Hungarian factories. BMW also wants to produce electric cars at its factory under construction in Debrecen, eastern Hungary.